Competition in the Movie Rental Industry Research Paper

Competition in the Movie Rental Industry - Research Paper ExampleSuppliers make strategies such as patents in effectuate to acquire supremacy within the fabrication. Companies provide attractive plastic film prices and services in order to control the buying power of their customers. Buyers have several companies to choose from, and these companies must(prenominal) strive to keep their customers. Competition is high in the movie rental industry due to blowzy entry by new companies. There are several companies with similar products at reduced prices, which emergence competition. almost of the new entrants provide substitute products such as cable services. Customers subscribe to cable providers, and they pull in access to several movies at a reduced monthly price. Competitive rivalry between companies creates the compulsion for new strategies and businesses enjoy a competitive advantage only for a short time. One of the basketball team forces of competition is supplier powe r. Companies in the rental business acquire their content from studios and movie distributors. The movie industry has several studios such as Walt Disney, Pixar, and Warner Bros and other distributors from which rental companies can choose from. The number of suppliers and the uniqueness of their products coiffure the supply prices. smash hit leveragingd Movielink which is a leading movie downlink service and reduced the need for DVDs and plastic cases (Blockbuster Corporate, 2009). Suppliers and distributors who deal with DVD movies will experience reduced purchase power. Blockbuster customers can purchase and download movies from Movielink which reduces the need for DVDs. Netflix acquires its content by buying DVDs from studios and distributors, paying on a fee-per-DVD basis (Thompson, Strickland, & Gamble, 2009). Some suppliers offer unique products, which reduces the chances of substitution. Movie studios and distributors generate revenue by selling movies to rental companies and a mammoth number of viewers. This creates a symbiotic relationship between suppliers and rental companies, which controls supply prices. Buyer power in the movie rental business is usually high due to the wide range of movies present in the market. There is no legal substitute for movies in the market, which makes rental companies dictate the market prices. The industry has fewer operators who have similar product prices and deal in almost similar products. This enables the companies maintain high prices low-cost by several buyers since they do not buy large volumes of movies. Netflix has over 8.4 million subscribers who prefer online shop and mailbox delivery of movies. There is no cost of cancelling subscriptions and switching to other companies therefore, there is little migration of customers. Blockbuster expends total access sealed envelopes that can be traded for movies at no extra cost. Buyers can utilize these envelopes to purchase movies of their choice from the lo cal stores without incurring any shipping charges. Movie rental companies offer downloadable movies to join on the buying power of their customers. Competitors may offer diametrical prices to attract more buyers. Redbox offers its customers reduced prices in order to have a competitive advantage over Netflix and Blockbuster. The high demand for entertainment across the area provides rental companies with large numbers of customers. The presence of substitute products in the market creates competition between different businesses in the industry. Customers have a wide range of entertainment products to choose